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Lee Builders, Inc. v. Wells

Court of Chancery of Delaware, New Castle County

November 26, 1952

LEE BUILDERS, Inc.
v.
WELLS et al.

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[Copyrighted Material Omitted]

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Albert W. James and H. James Conaway, Jr. (of Hering, Morris, James & Hitchens), Wilmington, for plaintiff.

Daniel O. Hastings and Clarence W. Taylor (of Hastings, Stockly & Walz), Wilmington, for defendants.

BRAMHALL, Vice Chancellor.

On May 12, 1950, defendants and one J. Rowland Morgan entered into a written agreement for the sale by defendants to Morgan of parts of two lots with improvements in Elsmere, New Castle County, Delaware, defendants retaining a part of said lots for purposes hereinafter set forth.

The agreement provided, in substance: that the purchase price was to be $19,000, of which $1,000 was paid at the time of the execution of the agreement; that plaintiff at its own expense should remove the houses thereon to that portion of the lots retained by defendants, dig a cellar and erect foundations for the houses when moved, lay a sidewalk and driveway to conform to the new location; that final settlement would be made on or before September 1, 1950.

Shortly after the execution of this agreement defendants became dissatisfied with the arrangement and so informed the purchaser. After some negotiation, the parties on September 1, 1950, [33 Del.Ch. 318] executed a subsequent agreement, wherein it was provided that one Theodore Wells, Jr., a nephew of defendants, but not a party to this action, was to be paid an additional sum of $2,000. The time for settlement was extended to November 15, 1950. These agreements were later assigned by Morgan to plaintiff.

Settlement was delayed for a time by reason of the appearance of a defect in the title to one of the properties. Plaintiff also became concerned because of a suit in this court involving title to a thirty foot strip of land lying in the bed of the street upon which these lots abut. Both objections, if they were objections, were later settled to the satisfaction of plaintiff.

Difficulties again arose between the parties, largely relative to the work which was to be performed by plaintiff. Defendants again indicated their dissatisfaction with the arrangement. They informed a surveyor and a house mover whom plaintiff had sent to the property to examine the same that they were not going to comply with their obligation. Plaintiff had taken out a building permit for the construction of the buildings, had purchased the steel for the store building which it intended to erect on the property and had had it fabricated, at a total cost of approximately $10,000. Before doing the work which it had agreed to do plaintiff desired to have some definite assurance that defendants would comply with their obligations by executing and delivering to plaintiff a deed for the property. After numerous communications between the parties and their counsel, the then counsel for defendants advised counsel for plaintiff that defendants did not intend to perform their obligations under the contract and that therefore counsel for defendants did not have the authority to give to plaintiff the necessary consent to enter the property of defendants for the purpose of making the necessary improvements.

Defendant contended at the trial that the contract executed on May 12, 1950, was obtained by 'high pressure' methods and was not fair, just, reasonable and equitable with respect to the interests of the defendants. Defendants further contended that the contract was breached by plaintiff by reason of plaintiff's failure prior to November 15, 1950, the date of the expiration of the agreement, to move the houses of defendants to another location on the [33 Del.Ch. 319] same lot and to make the repairs and improvements as provided by the contract. At the trial plaintiff contended that these defenses were

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It will not be necessary for me to determine here whether or not plaintiff's motion should be sustained. Assuming that the signature of the defendants to the contract of May 12, 1950, may have been obtained under such circumstances that a court of equity in good conscience would not decree specific performance thereon, the fact remains that all the pertinent conditions of this contract were reaffirmed in the agreement of September 1, 1950. Defendants executed the latter agreement after full consideration and with the advice of reputable counsel. I do not see how defendants can now contend that there was any over-reaching or improper action on the part of the purchaser when later they executed an agreement containing substantially the same terms and conditions. The question of over-reaching, as far as it concerns the agreement of May 12, 1950, is therefore not now an issue. I conclude that the agreement of May 12, 1950, was ratified by the execution of the agreement of September 1, 1950, and that defendants cannot now repudiate it.

Defendants contend that plaintiff is not entitled to a decree of specific performance because plaintiff, say defendants, has not itself complied with the terms and conditions of the contract, in that it has failed to remove the houses of defendants and make the improvements called for in the agreement. Plaintiff contends that it was never given permission to enter the property of defendants for the purpose of doing the work and, further, that defendants by their own delaying tactics and by their refusal to comply with the terms of the agreement have prevented plaintiff from performing.

It is admitted by defendants that they originally did not intend to comply with the agreement of May 12, 1950. Other evidence in the case clearly corroborates that admission.

[33 Del.Ch. 320] As to the agreement of September 1, 1950, the testimony shows that plaintiff, in order to determine exactly the attitude of defendants with respect to their intentions as to whether or not they would comply with that agreement, made numerous efforts to secure permission from defendants to enter the premises for the purpose of proceeding with the work which it was obligated to do. Defendants desired some assurance from the plaintiff as to its ability to comply on its part. Just what assurance was required is not clear. Nor do I understand why such assurance was necessary, since plaintiff was obligated by the agreements to proceed with the work and on a number of occasions indicated to defendants its willingness to do so. Permission to plaintiff to enter defendants' properties for this purpose was never forthcoming.

Defendants contend that under the terms of the agreements of May 12th and September 1st plaintiff was entitled to enter in order to comply with the agreement. The agreement provided that defendants were to remain in possession until settlement had been effected. It is not clear in that respect and the parties apparently were confused as to the construction of this portion of the agreement. Be that as it may, both plaintiff and defendants at the time of the negotiations assumed that it would be necessary for plaintiff to receive the consent of defendants before entering the property. As heretofore stated by this court in this case relative to this very question, on a motion to dismiss, 'the actions of the parties during the life of the contract are of great weight in determining the contract's meaning.' Morgan v. Wells, Del.Ch., 80 A.2d 504, 506.

In addition to the statements of the defendants themselves, the record also shows that they did not change their attitude during the life of the contract. They informed the witness who went to defendants' property on behalf of plaintiff for the purpose of making a survey of the property to lay out the lot which defendants were retaining, and again to a man whom plaintiff was contemplating employing to move the

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houses of defendants, that they did not intend to comply with the terms of the contract. This was also corroborated by the testimony of counsel representing the defendants at the time of the negotiations.

[33 Del.Ch. 321] In order for a party seeking specific performance against another to prevail, he must show as a condition precedent to his obtaining remedy, that he has done or offered to do, or is then ready and willing to do, all such acts as shall be required of him in the execution of the contract according to its terms. In the language often used he must show himself 'ready, willing, desirous, prompt and eager'. 4 Pomeroy on Equity Jurisprudence, Sec. 1407, p. 1050; Kittinger v. Rossman, 12 Del.Ch. 276, 112 A. 388. However, the law does not require the doing of a vain and useless act. If plaintiff was willing and eager to comply with the terms of the contract, but was prevented from doing so by the acts of defendants, or if plaintiff, with the knowledge of defendants, was led to believe that defendants did not intend to carry out the contract, plaintiff is entitled to specific performance even though the time for the performance of the contract has expired. See Wilkins v. Evans, 1 Del.Ch. 156. In this respect acts insufficient in themselves to make a complete tender may operate as proof of readiness to perform. Erkess v. Eisenthal, 354 Pa. 161, 47 A.2d 154, 156.

I am convinced that plaintiff has demonstrated conclusively that it was always ready, eager and willing to comply with the terms of the contract. I also find that the attitude of defendants with respect to their performance of the contract was such as to lead plaintiff to ...


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